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Citibank's E-Business

Strategy for Global

Corporate Banking
Group 5

Following an intense competition in 2000, Citibank
started to establish its e-business strategy
An internet platform should enable all customers with
similar needs to conduct business online
The case tells about Citibank's challenges in serving
corporate customers with diverse needs

Company Background
Citibank was founded in 1812 as City Bank of New York
Third largest bank company of the United States
Global bank with almost 4000 branch locations in 36
Around 20% of Citibank's revenues are made in the
Asian market
Their online services division is among the most
successful (15 million users)

The impacts of the internet on the competitive

landscape of corporate banking
Transformation from traditional banking to online
banking caused by growing global markets
E-services became a necessary tool for clients to
avoid paperwork
Banks needed to offer online services in order to:
keep up with their customers needs
be competitive on the financial market

The differentiate products

Customer service (web and telephone payment
capabilities) customized internet payment
application platform Investments in technology to
support front-end and back-end electronic systems
Three core products (Transaction, Corporate Finance
and Treasury Market Services)Unified platform and
group-wide expertise
Online investment applications for short-term
investments (Treasury Vision)

Citibank competitive advantage

Global reach and long lasting local commitment
Strong brand recognition
Continuous investment in technology to improve its

How to Migrate Product

Citibank's huge transactional business which did basic, repeatable

processes could be commoditized

Regionalization by consolidating all data center within each country and

moving them to Singapore where centralized data and automated
processes were established

Integrating the web into business processes by incorporating secure

databases into the processing of a transaction Straight-ThroughAutomation (e.g. intelligent programs)

Citibank action taken to serve the need of two

very different market segments

Citibank's main goal was to shift all customers to Citi

Direct in order to make them use e-business instead of the traditional

banking systems

While MNC's didn't have problems with conducting business online, most
SME's were concerned about the security issues

To solve this problem, Citi Direct developed the newest security

procedures (access keys, single-use passwords)

To encourage conservative customers they lowered the prices for using

online business

With the market changing so rapidly

Citibank identify market needs

Citibank's first strategy to specialize in every market segment (front-end

services, software and system development) failed, because it couldn't
keep up with changing client needs

Then they focused on alliances and the use of their partners' strengths

Therefore Citibank corporate with companies that had complementary

technology, infrastructure or access to markets (Oracle, SAP AG)

Citibank protect its clients

Citibank made sure that vendors and suppliers were
aware of their strategy and would not exploit the
bank's existing strengths in the financial industry
Potential partners had to see the value that Citibank
gives them (financial services expertise, brand, global

External Environment
Political /



Regulators scrutinized third party arrangement, to

ensure the banks operation were not hijacked for
fraudulent purposes
The clients became e-enable
Web enabled financial process
Tendency of customers to collect payment online
and to access more

Subprime mortgages

Industrial Environment
Bargaining Power of
Cutomers = HIGH

Bargaining Power of
New Entrants= HIGH

Same technology are applied by other

companies, knowledge in technology
of customers already increase

Having difficult in
investment all at once

Power of
Supplier =
Having difficult in
investment all at

Rivalry among
More intensive
when other
competitor want to
improve market
competition by
following ebusiness strategy

Power of
Product =

SWOT Analysis

Leadership crisis
Operating expenses growth less than
revenue growth
Varied customer practices across
More intant fraud

Global investment network

Large customer base
Strong brand
Paperless transaction
Operational more efficient cost

Changing global environment

Price war during slow down economy
Risk caused increasing competition in

E-enabled corporate and middle

B2B e-payment
Parallel convergence
Can reach emerging market

Key technology
players Oracle,



Many areas in banking were affected by the internet.
Meanwhile customer changed their expectations and
needs through developing technologies. To adapt to
these changes without losing its traditional strengths
and adding extra value for their customers, Citibank
formed a global web platform that enabled customers
to conduct their business online.